Sounds like very strategic resignation. He and the board should...

Sounds like very strategic resignation. He and the board should think of something else to help the SP!!!

http://www.themercury.com.au/article/2010/06/08/150971_tasmania-news.html

NICK CLARK
June 08, 2010 08:00am
JOHN Gay's personal financial situation has improved by nearly $2 million since he resigned as chairman of Gunns.

Mr Gay's holding of 12.2 million Gunns shares had slumped to a paper value of $3.2 million when selling by institutional investors Perpetual Trustees and IOOF Ltd forced his hand on May 27.

Since then speculation of a takeover and investment in the shares by major institutions has lifted the value of Mr Gay's holding to $5.08 million.

Gunns shares, which had dropped as low as 26.5c before Mr Gay's resignation, closed at 41.5c yesterday.

They were 6.7 per cent down on Friday's close of 44c.

The fall came on the day Bank of America announced it had sold down its substantial shareholding.

It was Mr Gay's sale of 3.4 million shares in December last year for 90c each ($3.09 million) which caused significant institutional dissatisfaction with his leadership and a perceived lack of disclosure to the ASX about problems in the woodchip market.

That sale came a couple of months before Gunns announced a 98 per cent drop in half-year profit. Mr Gay also sold 3.4 million shares at 80c each in December 2008, raising $2.7 million.

In the past two years the Bell Bay pulp mill's fiercest advocate has sold his Gunns shareholding down by a third, from 18.7 million to 12.2 million.

His holding was worth close to $60 million when Gunns shares traded above $4 a share.

Several financial institutions have taken substantial shareholdings in Gunns since Mr Gay's resignation, among them Deutsche Bank and Morgan Stanley.

Gunns' market capitalisation is about $330 million, compared with $217 million late last month.

In capital raisings over the past two years institutions invested about $450 million in Gunns to help it pay for Auspine and ITC Hardwood.

To reduce its $600 million debt Gunns has sold its hardware division to a Woolworths subsidiary for $40 million.

An auction of some 28,000ha of native forest blocks is expected by analysts Bell Potter to raise up to $42 million.

Bell Potter analysis in April showed Gunns had a debt repayment of $10 million in December. Deutsche Bank analysts believe net profit after tax for 2009-10 will be $7.3 million compared with $56 million last financial year.